The U.S. national debt is piling up at a rapid pace, adding roughly $1 trillion every 100 days, triggering a serious warning of “massive collateral damage” from Bank of America. This alarming rate of growing debt is said to be influencing an explosive surge in cryptocurrency prices.
As of recent data, the national debt stands at nearly $34.4 trillion. Since June last year, every $1 trillion increment in public debt has happened approximately every 100 days.
The surge in U.S. national debt, the money borrowed to finance government operations, has been attributed to decisions made by the administrations to maintain economic stability during the COVID-19 pandemic among other factors. The decision to keep interest rates high as a counter-inflation tool has added to the rising cost of servicing the country’s debt pile. Experts worry this could have an impact on the financing of critical government programs such as Social Security.
Meanwhile, the price of Bitcoin has rocketed over the past year, again making it a $1 trillion asset while the combined market for Ethereum, XRP, and other cryptocurrencies is estimated to be well over $2 trillion. Bank of America analysts warn that the rapid rise in the U.S. debt load could fuel a further boom in the price of Bitcoin and other cryptocurrencies. Market experts have also pointed out a surge in the value of gold amid these developments, indicating that investors might be hedging their bets against economic instability.
On the other hand, Moody’s Investors Service has downgraded its ratings outlook for the U.S. government from stable to negative, a move sparked by the increasing risk to the nation’s fiscal strength.
Interest payments on the U.S. debt are scheduled to exceed defense spending for the first time, with costs predicted to hit $870 billion this year, according to the Congressional Budget Office. This represents a 32% increase from last year’s $659 billion in interest expense.
The situation has raised concerns among policy experts, who fear the mounting debt and interest payments could squeeze federal spending, making it challenging to fund core government programs and investments that drive economic growth.
1. “U.S. Dollar Collapse—Bank Of America Issues Shocking ‘$1 Trillion Every 100 Days’ Warning Amid Huge Bitcoin, Ethereum, XRP And Crypto Price Boom To Rival Gold”; Billy Bambrough, Forbes.
2. “The U.S. national debt is rising by $1 trillion about every 100 days”; Michelle Fox, CNBC.
3. “U.S. interest payments on its debt are set to exceed defense spending. Should we be worried?”; Aimee Picchi, CBS News.